Court Reinstates U.S. Contract With Lockheed

(CN) – The Court of Federal Claims improperly set aside a health-care contract between the Department of Defense and Lockheed Martin, because the court relied too heavily on the losing bidder’s affidavits, the Federal Circuit ruled.

The claims court vacated the government’s TRICARE contract with Lockheed Martin Federal Healthcare after finding that the contracting officer failed to analyze potential conflicts of interest. TRICARE is a health-care program for active and retired members of the military and their families. The claims court suggested having an independent auditor monitor the enforcement of Lockheed’s mitigation plan, but the government rejected this idea. Because the government refused the proposed oversight, the claims court enjoined it from renewing Lockheed’s contract. In its decision, the lower court relied extensively on affidavits filed by losing bidder Axiom Resource Management. Lockheed and the government appealed. The Federal Circuit found that the claims court violated administrative law by allowing Axiom to supplement the record with affidavits and then relying extensively on those affidavits to support its decision. “After all, a decision is not necessarily unreasonable simply because the disappointed bidder is able to find two witnesses who disagree with it,” Judge Prost wrote. The federal appeals court also agreed with the government that the claims court failed to properly review the record under the “arbitrary and capricious” standard.